1) If the TV is composite, it might not give good enought output for you. SVid is good, Composite isn't considered ok by most.
2) Best / easiest -> hardest / worst
a) Encoder -> about 40 bucks - 100. Many features. You will NOT be disappointed... I've tried them all.. and this IS the best. Changing keys, Easy to use, Easy to setup. MK64/IPacs/Wizkeys/Hagstrom They are ALL GREAT!
b) Joystick hacking. -> Good! If you can get enought buttons. They dont have ghosting problems or matix problems (all buttons can be pressed without interfearing with each other). Getting a USB one has the advantage of allowing multiples (so 2 usb controllers might be perfect for you). EBay for a few bucks each.
b.5) Playstation / N64 controller hacking. Not bad. You might have them all around. $15 item to convert it. Good if you have some good arcade games that you would also want to play.
c) keyboard hacking -> Sucky. BUT CAN BE DONE! Expect that you might NOT be able to use your keyboard, but others will work fine. They all have different chips on them. NONE are easy to hack. Might not have any way to solder onto. One keyboard might work, then getting the same brand/model might not. You will spend a crap load of time trying to find combinations of keys that will work together. IE, if you are doing this because you have extra time, and you want a cheap solution. Try this....
3) Lots of ways. Ways to change the bootup screens. You can start directly in any frontend (easiest is to put it in your startup... or you can have it your entire desktop). What OS are you running (98, XP?). Startoff with putting a frontend in your startup directory. After you get everything working, you can replace it with explorer as your desktop app.
good luck